Many people believe that USDA mortgage loans are only for farmers or for those who own plots of land in the countryside, but here’s a newsflash—USDA loans are not just for low-income buyers and low-priced homes that are out in the country on a farm.
This belief has led many to ignore USDA loan benefits when in reality, USDA loans are probably the most misunderstood home loans in America. Contrary to popular belief, a majority of American families and properties qualify for this home loan, which requires no down payment.
In 2021, USDA income limits increased, meaning that even more home buyers have become USDA eligible. Many have become confused when seeing the words “rural” in language describing USDA loans, but the definition of “rural” is quite flexible—over 97% of the land in America is classified as being rural.
In this article, we will look into the 2022 USDA loan income limits and options that may allow these limits to be exceeded.
USDA Income Limits 2022
USDA Rural Development increased USDA income limits for all U.S. counties. This means that more buyers now fall within the household income threshold. The keyword here is “household”–household income is defined as any income earned by anyone living in the home.
For single-family USDA Guaranteed loans, income limits are divided into groups. These groups consist of household members between one and four and between five and eight. Therefore, each county has an income limit for families with four or fewer people, as well as a separate limit for households with between five and eight members.
For a majority of U.S. counties, USDA loan income limits are now $91,900 for those with between one and four household members, and $121,300 for those with between five and eight members. But what if you still make over the limit for your household size? Keep reading to learn tricks to exceed limits.
How Much Did USDA Income Limits Increase? USDA Income Eligibility Explained
In 2020, the standard income limits were $90,300 for one- to four-person households, which means that income limits increased by $1,600 in 2021. For five-to eight-person households, the limit increased by $2,100 from $119,200.
This could make a big difference, even with the raises many people are receiving due to recent inflation. Any buyers under the new limit could get a no-down-payment USDA loan, but buyers over the limit may have to put down 3%, 3.5%, or 5% with other mortgage programs as a minimum to purchase a primary residence.
How to Exceed USDA Income Limits
Even though there are limits, there are exceptions to the rules. The USDA income limits can be increased for any household size by the following:
- $480 for each child under 18
- Documented child care expense
- Full-time college students 18 or older
- Disability expenses incurred
- Medical expenses for elderly or disabled
There are rules for using each of the above, and our loan officers will be happy to examine these exceptions as they relate to your personal situation.
USDA Higher Income Limit Areas
As mentioned above, most counties have household income limits of between $90,300 and $121,300, but there are some areas that have higher limits so it’s important to verify the country limits in your area. However, there are many counties in America where income is above average, and the USDA has increased income limits in these areas. Below are areas with higher income limits in states we cover.
|1-4 Person||5+ Person|
|High Income Area||Household||Household|
|West Palm Beach||102,500||135,300|
|Hilton Head Island||93,750||123,750|
|King and Queen |